The research department of BBVA agrees with the government that the Spanish economy is at last turning the corner and will gradually emerge from its second recession in four years.
The Bank of Spain has estimated that GDP contracted only 0.1 percent in the second quarter after declining 0.5 percent the previous three months, a figure subsequently confirmed by the National Statistics Institute. In response, the government said this marked a turning point. Unemployment in the second quarter of the year also fell from record levels to just under six million people.
In its latest report on the Spanish economy released Tuesday, BBVA said on the basis of available figures, GDP will probably grow by 0.1 percent from the previous three months, confirming a “trend of improvement.”
For the whole of this year, BBVA’s economists predict output will contract by 1.4 percent, slightly more pessimistic than the government, which is expecting a decline of 1.3 percent.
For next year, BBVA expects GDP to grow 0.9 percent. “Spain is expected over the coming quarters to mirror the recovery process that has normally been seen in other economic cycles,” BBVA said.
The bank also believes an increase in investment will lead to a sustained recovery in employment, which should start to show through in the first half of next year.